Infosys leads poaching war as IT companies rush to ramp up headcount abroad

Infosys poached 12 executives from Cognizant, 13 from Capgemini, five from TCS, and eight each from Wipro, Accenture and IBM in the fiscal year ended March.Jochelle Mendonca | ET Bureau | June 21, 2017, 09:16 IST

BENGALURU: Indian IT services companies are locked in a fierce talent arms race as they look to hire in overseas markets and are beginning to poach from familiar hunting grounds — each other’s rolls.

Take the case of Bengaluru-headquartered Infosys, which plans to hire more than 10,000 people in the US over the next two years. Of its 150 top-paid executives hired onsite in fiscal 2017, more than half came from the company’s rivals, show data accessed by ET.

Infosys poached 12 executives from Cognizant, 13 from Capgemini, five from TCS, and eight each from Wipro, Accenture and IBM in the fiscal year ended March. The others were hired from HCL Technologies, Zensar, Tech Mahindra and ITC Infotech.

Infosys, which reports first-quarter results in July, declined to comment on the number of people it has hired from rivals, citing the mandatory pre-earnings silent period.

To be sure, IT companies have always hired from each other. But rising protectionism across markets, including a Donald Trump regime keen on clamping down on H-1B visas, has meant that companies have had to recruit in a hurry in foreign markets.

With most IT companies in a rush to bulk up simultaneously in markets that have relatively smaller pools of talent, a talent war overseas is in the offing. “The talent arms race has started with gusto,” Phil Fersht, chief executive of IT consultancy HfS Research told ET.

Average annual salaries for IT professionals hover around $70,000 at Indian IT firms in the US but are unlikely to stay under $100,000 given the growing appetite for talent in these markets, said Fersht.

“This has already increased closer to the $100,000 mark. If Trump’s H1-B proposals get passed, this will likely be mandated at $130,000 minimum,” he said.

“The race for talent is not new. We have always been competing for talent. But, yes, now we will need more talent onshore than in the past,” UB Pravin Rao, chief operating officer at Infosys, told ET last month.

Campus HiringAnd the easiest places to scout for talent are rival Indian firms. “When you need to scale you go after the available talent. And currently, that is where it is available. We are not just looking at our rivals — the people who have a network — but also people with domain knowledge,” a top executive at an Indian company told ET.

He added that the market would calm down as companies reach some kind of steady state. “Everyone is hiring now. It’s a good time if you are a performer onshore,” he said.

Cognizant said it was dealing with the need to scale up onshore by hiring from campuses, through its acquisitions and by taking on employees from clients. “We have been hiring technology and management from dozens of US campuses as well as from the lateral market. We have made a number of acquisitions and also rebadged employees from our customer organisations,” said Debashis Chatterjee, president, digital systems and technology, at Cognizant.

Cognizant, which hired 4,000 people in the US in 2016, expects to accelerate its pace of hiring. “We expect to significantly ramp up our US-based workforce by hiring graduates from campuses and experienced professionals in the open market and by making more use of university, veteran, and related programmes,” Chatterjee said.

But troubles within the sector and more acquisitions could cool the market. “This could change as the industry gets squeezed and there is further consolidation,” HfS’ Fersht said.

IT companies are also focused on building their own talent pools within the markets to mitigate the need for larger hires from outside.

“We are hiring from 85 colleges in the US. We are building the talent pools onshore,” an executive with Tata Consultancy Services said. “We also use LinkedIn and other places to get lateral talent but it’s not like there is big move to bring in talent from rivals.”